Olympic Dam to boost output, focus on development

Olympic Dam has always been a mine driven to explore, with the imperative to push further a part of the operation’s DNA, no matter the owner, from Western Mining through to BHP.

The sheer size of the mine and its importance to Australia, particularly to the psyche of South Australia, cannot be overstated, yet it is a mine that almost didn’t exist.

Initially discovered through aerial surveys, the deposit was almost missed after the first nine initial drill holes showed nothing, and it wasn’t until the tenth hole copper was uncovered.

This mix of copper, gold, and uranium in the deposit – which itself creates additional processing and extraction issues – was formed through multiple instances of fracturing and mineralisation which came out of the site’s underlying granite.

These instances, although enriching the deposit, created a complex pattern of mineralisation and alteration which spreads outwards from the core, and changes at depth.

Olympic Dam’s asset president Jacqui McGill is upfront about the deposit, “Olympic Dam is BHP’s most complex operation,” she told Australian Mining.

Head of resources planning and development, Justin Bauer added, “It is heterogeneous, the minerals are everywhere.”

But these scattered minerals hold a massive wealth – it is the world’s largest single uranium deposit, fifth largest copper deposit, and one of the world’s larger gold deposits, although the iron ore that hosts the other metals is ignored, as general manager of surface operations Aimee Allen explained “the iron isn’t the right quality to bother obtaining”.

A mine with such a unique, one-off mix of geology and metals has always proved a challenge, but one that its series of owners have always been eager to surmount.

From the start the mine has been approached differently due in part to the different approach required because of the uranium, with a regional and local mentality that runs throughout the business.

This even shows itself in its output, smelting in Australia and producing its own copper cathode and anode – as well as yellowcake and gold and silver – as opposed to simply digging and shipping like the majority of other copper and base metal mines in the country.

Yet, the mine was always set to play a major role in Australia, and its psyche, and is marked as one of a string of phenomenal discoveries by geologist Roy Woodall, who counts the Kambalda nickel field, Yeelirrie, and the East Spar oil field amongst his findings.

But as the commodity downturn continues, it has been forced – along with the rest of the resources industry – to re-examine the way it does business, and the future of operations.

Olympic Dam’s new frontier

Despite more than a quarter of a century of operations, the mine still had a number of surprises up its sleeve.

The underground operations plan to have more than 400 kilometres of tunnels. Image: Aaron Bunch
The underground operations plan to have more than 400 kilometres of tunnels. Image: Aaron Bunch

From the unique polymetallic makeup of the mine, the decision to process copper cathode and anode on site rather than simply dig and ship, installing fresh air vents every 750 metres to provide high levels of access to fresh air, to implementing the world’s longest fully automated underground train system, Olympic Dam manages to make it seem like a simple everyday occurrence for the industry.

However, in 2007 it managed to shock the market by announcing that it had increased its resource by 70 per cent, almost overnight, which the miner dubbed its Southern Mine Area

Much of this is due to the shape of the deposit, and the way in which it was originally mined.

According to McGill, the deposit is shaped almost liked a guitar, and despite the high levels of metal already produced at the operation, it had essentially only mined “the neck of the guitar/deposit”, leaving the vast majority of it relatively untouched.

BHP is now chasing this ore down via an expansion of its underground operations to access the shallow deposit.

It is delineating new stopes – with plans to proceed at a rate of 35 stopes per year – and over the next five years will construct 120 kilometres of new underground tunnels, expecting to drive down a few hundred metres more.

It has begun early work on the first stopes, with mining under way on the blocks known as the Violets.

However, there has been some division in South Australia over BHP’s choice of extraction, as it makes expands via greater underground mining instead of the open cut pit it initially focused on –which would have brought about more jobs – as well as introducing a heap leaching process.

South Australian senator Nick Xenophon told Australian Mining the mine is of major significance to the state, but voiced his disappointment over the expansion decision, saying more could be done to support the people of South Australia in terms of employment, adding the recent series of job cuts at the mine did not aid the situation.

McGill acknowledged the severity of the cuts, but said the mine has now reached a sustainable level. Image: Aaron Bunch
McGill acknowledged the severity of the cuts, but said the mine has now reached a sustainable level. Image: Aaron Bunch

McGill responded to Xenophon’s statement on employment levels, saying “[while] we may have gone hard on cuts, we’ve focused on ensuring the right levels of staff for the operation, it was about creating a more sustainable Olympic Dam”.

“We’ve finished with these staff changes,” she added.

McGill went on to state it is actually advertising roles, approximately 120, for underground positions.

As a uranium mine, any focus on the metal as power source always brings the spotlight on to Olympic Dam.

Unsurprisingly, on the back of South Australia’s Nuclear Fuel Cycle Royal Commission which investigated – and supported – the state potentially becoming a site for storage of intermediate and high level (spent fuel) nuclear waste, the many tunnels of Olympic Dam were highlighted as a possible storage site.

This notion was quickly mooted by asset president Jacqui McGill, “We’re a resources company, not a waste repository.”

“That’s not in our business model and it’s not in our plans.”

Productivity measures

As Olympic Dam looks forwards to the development of its Southern Mine Area, it is investigating a range of different technologies and processes to maximise productivity and take full advantage of the Southern Mine Area, as well as debottlenecking current process pinch points, to push its operations to US$1 per pound unit costs.

“Over the next five years, with the current mine and surface facilities and without major capital, we could grow annual copper production to approximately 230,000 tonnes,” McGill said.

“This would enable us to refine enough copper to build 14 million electric cars; and the uranium we produce could power Australia with low-carbon electricity.”

One of the major leaps in productivity forecast is through effective and cohesive vehicle utilisation.

Debottlenecking of the processing chain is one of the mine's productivity focuses. Image: Aaron Bunch
Debottlenecking of the processing chain is one of the mine’s productivity focuses. Image: Aaron Bunch

Olympic Dam’s general manager of underground operations, Troy Wilson, explained that Olympic Dam is examining a range of different options to achieve its forecast rapid growth in truck and jumbo productivity.

These include payload and speed monitoring systems, automated or tele-remote control machines, and capacity matching of machines – having the right machine loading the trucks. Part of this capacity matching has seen trucks efficiencies slightly reduced in order to lift the operating efficiency of the hoist system, providing increased productivity despite the apparent efficiency loss.

A massive smelter shutdown, for maintenance and upgrading, is also on the cards for FY18, running to approximately 40 days in length.

Getting feedstocks and blends right for the smelter has been a major focus, and integrating its smelting and refining into its proposed heap leach process may be a key component in the mine’s future operation.

The hard word?

Another arm of this productivity push has been a focus on greater communication with its staff, contractors, and suppliers.

Part of this change in tack is due to the company’s focus on cost cutting measures, as well as a way to increase safety and morale on site.

“We are asking our leaders to create a culture of ‘why’ where employees are encouraged to question everything and provide feedback when they think things could be done differently,” McGill said.

This environment has seen a number of developments and cost-saving initiatives come from straight from staff, such as a low cost safety solution for the detection of forklift operations or the costs of buying as opposed to renting equipment.

These initiatives are also likely to be rolled out across BHP’s other businesses, creating further cost savings throughout the company.

Better contractor communication led to increased productivity
Better contractor communication led to increased productivity.

Closer communication with contractors also resulted in surprising cost savings and stronger relationships. One rental firm found when equipment was returned from Olympic Dam, it was often low on fuel, forcing the company to charge the miner to refill the machines and charge Olympic Dam the costs. In order to develop a stronger relationship, built in part by this increased communication, the rental equipment company simply asked if they could refill on site before the machines left the premises, saving them time and Olympic Dam money.

Speaking to one contractor, he noted the increase in communication with staff on site, and the easier process for getting him on site faster, without compromising safety.

“Previously, the company in charge of getting us on site was slower, I once arrived and had to spend two days doing nothing because the paperwork wasn’t completed for me to actually enter the site,” he told Australian Mining.

“Now it’s much easier and straightforward.”

Heap leach

Much of the future of the project relies on its heap leach, which will work to take Olympic Dam to the next stage in its evolution.

Currently it is trialling the method as a cheaper way to process ore on site, and despite the mine’s mineral complexity, a simplification process.

Bauer explained Olympic Dam is moving away from some of the aspects of the mine’s current surface technology as part of its productivity pushy, as it is lower cost to build and operate, the mine’s general manager for underground operations Tory Wilson adding that it essentially trades strong acid and heat for a weaker acid and time.

The leach differs from others in the industry, which can take 12 to 18 hours minimum, as Olympic Dam’s can take up to a year.

“To do the various cycle work that we need to do, we have to take time to do that. Because what we want to test is not just that it’s successful on one ore type, but it covers the broad range, with the feedstock that it would see year in, year out, to de‐risk the project,” McGill said.

“The other thing that we’re actually testing is the whole surface supply chain, so taking that ripios from the heap leach, crushing it, grinding it, floating it, producing concentrate, and then putting it into test units for a smelter. So we actually have to test that process end to end.”

However, a decision on its implementation won’t be made in the near term, McGill explaining that a heap leach decision will be made after trials, by FY19.

A local mine for local people

The town of Roxby Downs was purpose built for the mine, and in turn the mine has sought to support the local community and region through a series of different social programs.

The Arid Recovery program is protecting, and reintroducing, native species. Image: Aaron Bunch
The Arid Recovery program is protecting, and reintroducing, native species. Image: Aaron Bunch

“We work collaboratively with our local communities to develop key partnership that seek to enhance quality of life in areas including health, education, community capacity building and the environment,” McGill said.

One of its unique support programs is Arid Recovery, where Olympic Dam works alongside a conservation research initiative focused on rebuilding the region’s arid lands and reintroducing native species wiped out by feral animals, such as the bettong and bilby, and teaching them to avoid predators such as cats and foxes.

It also participates in Mining Minds Building our Community, a partnerships between education sites in Roxby Downs, Woomera, and Andamooka that targets education, high school completion rates, and post-school destinations.

Indigenous engagement is also key, with BHP focusing on building strong relationships with three local Aboriginal groups, the Barngarla, Kokatha, and Kuyani peoples.

Looking forward

With all these growth plans, McGill remains realistic about the future.

_AB15337“We have to match what is sustainable [in terms of growth and output] with business performance on the copper cycle, and we’ll look for opportunities to maximise output for Olympic Dam,” she said.

She remained confident the Southern Mine Area will help improve grades to more than 2.2 per cent by 2021, compared to the lower than one per cent average grades the operation currently has,

Bauer added, “The combination of the heap leach test work in Adelaide and this potential upside [from the Southern Mine Area] here gives us a way to de-risk the resource and de-risk the technology, which is a great thing.”

Time will tell for the mine as it begins to access its major Southern Mine Area, and heap leach trials show positive result, as to what role it will play not only in South Australia’s mining future, but the nation at large.

 

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